An enterprise purchases a new piece of equipment with an initial booked value of 1 million yuan, an estimated useful life of 5 years, and a net salvage value of 56,000 yuan. In the depreciation calculation using the double declining balance method, the equipment is depreciated as follows:
In the first year, because of the double declining balance method, the depreciation rate is 2/5, so the depreciation amount is $1,000,000 divided by this rate, which is 400,000 yuan.
For the second year, depreciation is the residual value (100-40) divided by the same rate to get $240,000 dollars.
Then comes the third year, and the depreciation is (100-40-24) divided by 2/5, which equals $144,000, the exact value mentioned in the article.
In the fourth and fifth years of the equipment, depreciation is (100-40-24-14.4-5.6)/2, or $80,000, in both cases, since the estimated net salvage value is close.
In summary, the equipment's depreciation in the third year is $144,000, which is based on the double-declining balance method. In practice, the depreciation method needs to be adjusted in due course according to the use of fixed assets and accounting standards to ensure the accuracy of financial reporting.